ActorMike
Well-known member
They didn't say they would die. Frankly. Anytime they have taken over a site, it's not good from what I've seen and also read in Google reviews and Reddit.
VerticalScope Inc Headed toward Bankruptcy?
- Thread starter ActorMike
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Mr Lucky
Well-known member
Look on the bright side, they use xenForo so have a licence for all those sites - hence helping to keep xenForo buoyant.
Considering
New member
Wow they do own a lot of communities for sure!
JackieChun
Well-known member
They destroyed so many forums back in the day, especially the big automotive ones. Made cash offers that owners couldn't refuse and then ran those sites into the ground.
Charlie G
Member
Why would they do this? Surely they would want to at least see a return on their purchase.
JackieChun
Well-known member
Same reason a lot of other traditional businesses went on shopping sprees for established web sites. They thought it was going to be easy money, place ad banners and viglinks and profit. They got their asses kicked. A lot of communities revolted and the users and admins just left.
ActorMike
Well-known member
Poor management. Also, it's much easier to manage one forum versus 200+! Businesses are bought all the time and tank after new ownership takes over.
Charlie G
Member
I guess for those of us who have created such communities it is not about the money.
I have declined 3 offers from VerticleScope over the years, my forum still thrives.
It will be interesting watching how things play out over the next few months/years if they are in trouble.
i hope they do sell. I could potentially be a buyer for an old competitor.
unfortunately, my largest competitor is an IBrands site now, so that's a different ball game.
Long and sort, VS failed because:
They didn't listen to their customer(s). The forum users.
The customer said, I don't want your stupid skin. I don't want your plastering of ads, I don't want your paid memberships.
They did it anyway.
and here we are.
It's a case study for some product group at some point.
People naturally resist change. I'm sure we all saw it at some point. Minor changes get people yelling. WE are creatures of habit. SOME things users like, but it's usually only when it doesn't disrupt the flow of what they are already used to. Add a new page, sure. Change the way my page looks to show that additional stuff, NO WAY!
HAD they listened - kept the sites relatively as they were when acquired, i would imagine there would still be some decline (lets face it, forums are in a recession), but no where near the brink of closing.
unfortunately, my largest competitor is an IBrands site now, so that's a different ball game.
Long and sort, VS failed because:
They didn't listen to their customer(s). The forum users.
The customer said, I don't want your stupid skin. I don't want your plastering of ads, I don't want your paid memberships.
They did it anyway.
and here we are.
It's a case study for some product group at some point.
People naturally resist change. I'm sure we all saw it at some point. Minor changes get people yelling. WE are creatures of habit. SOME things users like, but it's usually only when it doesn't disrupt the flow of what they are already used to. Add a new page, sure. Change the way my page looks to show that additional stuff, NO WAY!
HAD they listened - kept the sites relatively as they were when acquired, i would imagine there would still be some decline (lets face it, forums are in a recession), but no where near the brink of closing.
Charlie G
Member
They base their offer on the revenue the forum generates. If they just left it to run as it was when they took over they would get their investment back, albeit in 4-5 years.
Absolutely. My recent migration from vBull4 to XF upset a few.
My 27,000+ member site used to see around 1,500 of them logging on daily, since the migration I'm struggling to see 1,300 each day.
Recent events have changed the way people interact with each other.
From around mid 2021 there was a noticeable change in peoples psychology, I suspect we will never return to how things were prior to this.
As a large conglomerate, they get better rates, more providers and other options the smaller guys don't get like special networks. Placement and proliferation was the issue.
Plus, internal ad sales teams could have done a lot of targeted selling - something i don't have time to do as a part-timer in this space.
Even without increasing ad space, they had the ability to break even in 1-2 years on a 4-5 year multiple price IMO.
Chris2
Member
That was always the argument I had with them when they approached me. They ignored it and always based the offer on current revenue. I suppose even if you had a forum with 50 million active users, but no ads or revenue coming in, their offer for it would be $0…
MySiteGuy
Well-known member
Reasoning based on multipliers, traffic trends, stability and longevity, reputation in the niche, etc. are all good things to argue, but a mythical "you'll make X more if you buy it" is walk-away for me.
I've bought and sold sites, and that's faulty reasoning for valuation. I don't blame Vertical Scope for ignoring it, with all due respect.
ActorMike
Well-known member
Happens a lot when people are selling a business. They are anticipating growth etc. A lot of people want more than something is worth. Investors want to talk about here and now unless you have a business showing a pattern of accelerated growth.
MySiteGuy
Well-known member
Yes, it happens a lot with sellers. Many sellers over value what they have, based on inexperience or probably more often from emotional attachments.
Experienced buyers focus on metrics. Try selling a land lot to a fast food chain based on "you can make more per customer than the restaurant already there", and that is not something they care about. They'll look at total traffic, traffic flow, disposable income in the area, competitor analysis, local zoning and business law, tax rates, and so on.
Buyers who don't heed this is why (in the restaurant example) sometimes you'll see one restaurant after another fail in the same location. Being a better chef than the last person or having better margins won't save an inherently bad location.
In a nutshell: "You can make 50% more per ad impression than I can" is not value the seller brings to the table. This added value the buyer brings to the business.
woody
Well-known member
I'm friends with a couple of the big sellers. Their business and family priorities changed and those big sales allowed them to pursue other ventures. Some are still in the industry and doing well, others pursued different avenues. A muli-million dollar offer is hard to turn down when you are ready to move on. And guaranteed no private buyer could afford the purchase.
The best-run forums have owners who remain passionate about their subject.
My retirement adviser asked me "what would change with your lifestyle if you sold?" My answer? "Nothing" ...so there was no reason to sell. It has been my fulltime job since 2009
And honestly, there is a LOT of legal stuff that has changed in the past 20 years. The legal side takes it's toll.
They probably do see a return on their purchase - if you're primarily making money from ads from organic search, it takes a long time for that traffic to decline, even after the community is dead (niche dependent).
It also takes a long time to kill a large site, even with mismanagement. The last VS site I was part of took years to go from thousands of users online, down to 10-20.
They also had an aim with their Fora platform to create a Reddit style competitor longer term - individual communities matter less, as long as impressions are high across the network. Their implementation of this has been pretty poor though.
JamesBrown
Well-known member
Depends what your forum is worth and what they are offering.
Friend of mine sold his forum to Vscope. Funny you mention Nuke because his forum started out on the Nuke platform and he was known as "Nuke Admin"
I doubt he thought about nuking it though, preferring the £250,000 Verticalscope paid him. Worked out about £2 a member. I expect, that if his forum had only been worth about £8. he might have nuked it.
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